Deals wrap: What drives insider trading culprits?
The U.S. government’s crackdown on insider trading continues. On Wednesday, two men were accused by federal prosecutors of carrying out a 17-year conspiracy to trade on corporate merger secrets stolen from three major U.S. law firms.
As this latest case makes clear, non-disclosure rules and clever systems of checks and balances are only so helpful in preventing insider trading.
“You can’t legislate human behavior. People will act as people will do,” David Lazarus, senior managing director, co-founder, EdgeRock Realty Advisors, said at the Reuters Global M&A Summit in New York, adding there’s always people whose greed will push them over the line.
Shares of Swiss commodities trader Glencore are set to start trading in London on May 24 and in Hong Kong on May 25, a Hong Kong newspaper reported.
Virgin Atlantic boss Sir Richard Branson told Bloomberg that he plans to remain a “major shareholder” in his airline even as his company seeks out a partner to compete with British Airways.
“Generally in their mid-20s or early 30s, today’s start-up founders are becoming more assertive in funding rounds, securing better terms and, in many cases, cashing out part of their investments well before an initial public offering,” writes Evelyn M. Rusli in NYT’s DealBook.
Is the venture fundraising industry becoming too exclusive for its own good? PeHub’s Connie Bessemer investigates.
DealZone Daily
Royal Dutch Shell and PetroChina have secured Arrow Energy’s coal-seam gas assets for $3.1 bln after sweetening their offers for the business. The fresh bid was pitched at a 35 percent premium to Arrow’s share price before the first offer was announced, highlighting burgeoning interest in the coal-seam gas industry.
The former chief exexcutive of AIG is to sell most of his stock in the U.S. insurance giant to a unit of Swiss banks UBS. The deal for the 10 million shares, at about a 20 percent discount to Friday’s closing price, will earn Maurice “Hank” Greenberg $278.2 m.
Private equity firms are interested in acquiring and merging two German department store chains. U.S. firms are interested in acquiring Metro’s Kaufhof and Arcandor’s Karstadt chains, people familiar with the matter said.
For more deals news from Reuters, click here.
And in other media:
Richard Branson’s Virgin Money has lined up financing from Abu Dhabi Sovereign Wealth Funds and buyout house Blackstone needed to buy 320 bank branches from Royal Bank of Scotland, the Daily Express reports. Other suitors for the estate include Spain’s Santander and National Australia Bank.
DealZone Daily
British bid target Cadbury will paint a glowing picture of its prospects this week as it makes an impassioned plea for independence and endeavours to fend off Kraft’s advances. Meanwhile, Italian chocolate-makerFerrero is still undecided on whether or not to bid for the embattled confectioner but has lined up a $4.5 billion loan from Mediobanca, The Times writes, citing Italian news reports over the weekend.
In another multi-billion M&A process, Dutch brewer Heineken will pay $5.4 billion in shares to acquire the beer business of Mexico’s FEMSA.
For other deals news from Reuters, click here.
And in other media:
Richard Branson has approached US buyout giant Blackstone about backing a bid for Northern Rock’s “good bank” being spun out of the state-owned lender, according to the Daily Telegraph.
Formula One boss Bernie Ecclestone and Luxembourg-based investment firm Genii Capital, which recently agreed a deal to buy a stake in the Renault F1 team, will soon have initial financing in place to fund a purchase of Swedishcarmaker Saab, Dagens Industri reports. Reuters story here.
Virgin acquires banking licence
Sir Richard Branson boosted his attempt to become a leading player in the UK banking sector by agreeing to buy Church House Trust, a small regional private lender. The deal effectively gives Virgin Money a banking licence, allowing it to offer a full range of products to consumers, since the proposed purchase has already been approved by the Financial Services Authority (FSA).
After making the acquisition, Virgin aims to grow its banking business organically. However, it has not ruled out buying further assets, such as those that RBS and Lloyds have said they will divest. Buying Northern Rock assets might be possible too. The offer document states: “Having established an initial banking platform, the Virgin Money Directors believe that the acquisition of Church House Trust will enable Virgin Money to contemplate future acquisitions as appropriate.
“The Government has said it hopes the disposal of bank assets will see new players enter the market and Virgin Money may consider opportunities should they present themselves.” At present Virgin has 2.5 million customers of its existing financial services arm, which offers credit card, savings, insurance and investment products. However, Church House Trust is allowed to offer mortgages and take deposits as well.
Virgin will put in £37.3 million of new capital into the Church House Trust business. In 2008 Virgin Money made a £27.5 million in pre-tax profit on £98.4 million turnover. Church House Trust reported a £450,000 pre-tax profit on £4.05 million operating income for the same period. Church House Trust shareholders will receive 509.2p in cash and 1.0294 contingent loan notes for each share they own. That values the business at £12.3 million.
Virgin has received irrevocable undertakings to accept from investors representing 65.8 percent of the shares. Europa Partners advised Church House Trust. Quayle Munro acted for Virgin Money.
(From Acquisitions Monthly)
